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The control of game form recognition in experiments: understanding dominant strategy failures in a simple two person “guessing” game

Published online by Cambridge University Press:  14 March 2025

Eileen Chou ,
Margaret McConnell ,
Rosemarie Nagel  and
Charles R. Plott
Eileen Chou
Affiliation:
Kellogg School of Management, Northwestern University, Evanston, IL, USA
Margaret McConnell
Affiliation:
Division of Humanities and Social Sciences, California Institute of Technology, Pasadena, CA, USA
Rosemarie Nagel
Affiliation:
Institucio Catalana de Recerca i Estudis Avançats (ICREA), Department of Economics, Universitat Pompeu Fabra, Barcelona, Spain
Charles R. Plott*
Affiliation:
Division of Humanities and Social Sciences, California Institute of Technology, Pasadena, CA, USA
*
e-mail: [email protected]
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Abstract

This paper focuses on instructions and procedures as the reasons that subjects fail to behave according to the predictions of game theory in two-person “guessing game” (beauty contest game) experiments. In this game, two individuals simultaneously choose a number between 0 and 100. The winner is the person whose chosen number is the closest to 2/3 of the average of the two numbers. The weakly dominant strategy is zero. Because of the simplicity of the game, the widespread failure of subjects to choose the weakly dominant strategy has been interpreted as evidence of some fundamental inability to behave strategically. By contrast, we find that subjects’ behavior reflects a lack of understanding of the game form, which we define as the relationships between possible choices, outcomes and payoffs. To a surprising degree, subjects seem to have little understanding of the experimental environment in which they are participating. If subjects do not understand the game form, the experimental control needed for testing game theory is lost. The experiments reported here demonstrate that the failure to act strategically is related to how the game is presented. We test how well subjects are able to recognize the game under a variety of different presentations of the game. Some subjects fail to recognize the game form when it is presented abstractly. When the game is transformed into a simple isomorphic game and presented in a familiar context, subjects do choose weakly dominant strategies. While our results confirm the ability of subjects to make strategic decisions, they also emphasize the need to understand the limitations of experimental subjects’ ability to grasp the game as the experimenter intends. Given these limitations, we provide suggestions for better experimental control.

Keywords

ExperimentsGamesMethodologyInstructions
Type
Research Article
Information
Experimental Economics , Volume 12 , Issue 2 , June 2009 , pp. 159 - 179
Copyright
Copyright © Economic Science Association 2008

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